Tag Archives: Social Science

Do Economists Care?

Art Carden:

Heavy traffic is a problem every economist in the world knows how to solve: price road access, and charge high prices during rush hour. With technologies like E-ZPass and mobile apps, it’s easier than ever. That we don’t pick this low-hanging fruit is a pretty serious indictment of public policy. If we can’t address what is literally a principles-level textbook example of a negative spillover with a fairly easy fix, what hope do we have for effective public policy on other margins? (more)

Yes! If economists actually cared about influencing real policy, they would:

  1. Identify a few strong candidate policies that are a) widely endorsed by economists, b) based on relatively simple clean analysis, c) not much adopted in the wider world, and d) should bring big gains.
  2. Try to engage other intellectuals in detail on one or a few of these, seeking to either gain their endorsement, or to understand better the barriers that block them. If possible, do this as a group, and using all our status levers to make them respond in detail. If we succeed in persuading intellectuals, then join with them to try to persuade policy-makers, again either succeeding or better understanding barriers.
  3. Once we better understand barriers, focus our economic research on doing what it takes to overcome them.

By not doing this, we basically say that while we think we know how to make a better world, we don’t much care if that happens; our priorities are elsewhere.

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Social Science Exists

A student with a mathematical-physics background could easily convince himself that he has superior mathematics abilities than typical economists and superior statistical and computational skills than most economists. He might go on to conclude that, as a consequence of his superior mathematical and computational abilities, he should be able to enter economics and start contributing quickly and easily. He might also anticipate that he could easily adapt established models or techniques in physics to study economic phenomena and impress the profession.

If you are one of these people, let me try to disabuse you of these notions. Your mathematical abilities are actually not that much better than most economists (if they are better at all). You will have to spend a lot of time acclimating to the subject and the path to actually making contributions will be long and difficult. In all likelihood, there are very few (perhaps zero) off-the-shelf models or techniques in physics (or engineering, or chemistry, …) that will produce meaningful economic results. (more; HT Justin Wolfers)

Yup! I often meet scientist types who talk about some problem they are working on, which turns out to be a social problem related to ones that social scientists have explored. But they won’t believe this unless you show them work that uses methods and concepts with which they are familiar. They just can’t believe there are useful methods and concepts that they don’t already know.

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Dust In The Wind

All we are is dust in the wind. (Song lyrics)

Alex:

Contra Tyler, the lesson of history is that few things are as effective at launching a revolution as is moral argument. Without the firebrand Thomas “We have it in our power to begin the world over again“ Paine, the American Revolution would probably never have happened. (more)

Imagine standing at the shore of a river. You scoop a handful of water, and throw it downstream. By how much do you expect that act to change the flow of the river into the ocean miles downstream? I expect the effect to be far less than a handful of water arriving a few seconds earlier. More like a few atoms arriving a few seconds earlier. The speed of a river is a balance between gravity and friction, and that balance is likely to be quickly restored after disturbances like throwing a handful of water.

This seems a pretty typical example of influencing the physical world. The vast majority of such influences quickly disappear. So if you want your influence to last, you have to choose carefully. For example, since on Earth nature only rarely moves big stones, you might succeed in assembling a stone wall that lasts for thousands of years. At least if other people don’t want to knock it down.

Now consider trying to have a long term social influence. As with physical influence, we should expect that most efforts to influence the social world also diminish quickly away from the point of influence. After all, many aspects of the social world also result from balances between opposing forces. For example, if US independence was largely inevitable in the long run, then Thomas Paine could have at most influenced when exactly when the US became independent.

But what if there are tipping points? Imagine that a burst of floodwater came to the edge of overflowing a dam. An overflow might dig a channel leading in a new direction, changing the course of a river for a long time to come. So adding or subtracting just a little water near that overflow point might have a big long term effect. Can this metaphor give us more hope for long term social influence?

Well first, such tipping points must be rare – the vast majority of points can’t tip very far. Second, when many people can influence a social event, not only are most people only a drop in a tide of influence, most people are also only a drop in a tide of information. For example, imagine that people were pushing for or against US independence based on their best info on if that is good for the world. In this case Paine could only be in a position to tip the outcome if many other people also could tip the outcome, and if they were pushing in many different directions, with their net effects nearly balancing out.

In a case like this, Paine couldn’t be at all sure that a US revolution was a good idea. After all, an awful lot of people would have best info suggesting it was not a good idea. And in fact Bryan Caplan makes a good case that it wasn’t in fact a good idea.

Of course many people might have been pushing based on private interests, instead of a common good. But this still wouldn’t give Paine much reason for confidence in his tipping the world to a better place. Either many others would try to help the world, or Paine couldn’t have good reason to think he is the only exception.

So are there any good ways to have long term influence? One idea is to find a social situation like the stone wall, where you can add things that aren’t likely to get moved, and where your stones aren’t likely to be added anyway a bit later by someone else. Perhaps doing intellectual work on highly neglected topics is something like this.

See also: Long Legacies

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Who Care About Econ Errors?

An economist would rightly lambasted for writing a popular article where perpetual motion machines, or anti-gravity, were central elements. Especially if that economist didn’t even notice that these violate well-established scientific consensus.

But famed Princeton neuroscientist, novelist, and composer Michael Graziano has a popular article that errs nearly as badly in its economics. And, alas, I doubt many will consider that worthy of lambasting, or that Graziano will feel embarrassed by it. Or even consider the issue worthy of comment.

Graziano’s economics error is to focus entirely on demand-side effects, and completely ignore supply-side effects, when summarizing the social implications of brain emulations. That is, he apparently can only see using brain emulations as a way to make a “virtual afterlife” vacation-land. So he talks only about who gets in and what they do there. He can’t even seem to imagine that emulated brains might be useful workers, and so drastically change the world outside of virtual heavens. (A subject I’ve analyzed in depth.) Read for yourself:

Endless fun  The question is not whether we can upload our brains onto a computer, but what will become of us when we do. …

For nearly 30 years, I’ve studied how sensory information gets taken in and processed, how movements are controlled and, lately, how networks of neurons might compute the spooky property of awareness. I find myself asking, given what we know about the brain, whether we really could upload someone’s mind to a computer. And my best guess is: yes, almost certainly. That raises a host of further questions, not least: what will this technology do to us psychologically and culturally? Here, the answer seems just as emphatic, if necessarily murky in the details. …

People … don’t like to die. … Some of them already pay enormous sums to freeze themselves. … These kinds of people will certainly pay for a spot in a virtual afterlife. … Think of the fun to be had as a simulated you in a simulated environment. You could go on a safari through Middle Earth. You could live in Hogwarts. … You could keep in touch with your living friends through all the usual social media. …

We will tend to treat human life and death much more casually. People will be more willing to put themselves and others in danger. … Will simulated people, living in an artificial world, have the same human rights as the rest of us? … Who decides who gets in? … issues … will arise if people deliberately run multiple copies of themselves at the same time. … Do [married couples] stay together? …

Two people will be able to join thoughts directly with each other. … Pretty soon everyone is linked mind-to-mind. The concept of separate identity is lost. The need for simulated bodies walking in a simulated world is lost. The need for simulated food and simulated landscapes and simulated voices disappears. Instead, a single platform of thought, knowledge, and constant realisation emerges. … Real life, our life, will shrink in importance until it becomes a kind of larval phase … I am not talking about utopia. To me, this prospect is three parts intriguing and seven parts horrifying. I am genuinely glad I won’t be around. (more)

So why won’t Graziano won’t be embarrassed by this? Because his colleagues won’t see it as valid criticism, because most don’t think economics really exists as a source of reliable insight.

Btw, I doubt that even in a virtual heaven most people would want to spend much time hooked up directly to share each other’s thoughts in depth. Our minds aren’t designed for that, and i doubt simple modifications can make that work well. And I’m even more skeptical that productive working ems would typically be hooked up this way.

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Me on RT America Soon

In a few hours I’ll appear on a news show on RT America, talking about organ sales. You can watch live here; here is the 5 minute video:

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The Coalition Politics Hypothesis

Game theories let us analyze precise models of social situations. While each model leaves out much that is important, the ability to see how an entire set of payoffs, info, and acts work together can give powerful insights into social behavior. But it does matter a lot which games we think apply best to which real situations.

Today the game most often used as a metaphor for general social instincts is the public goods game, where individuals contribute personal efforts to benefit everyone in a group. This is seen as a variation on the prisoner’s dilemma. With this metaphor in mind, people see most social instincts as there to detect and reward contributions, and to punish free-riders. Many social activities that on the surface appear to have other purposes are said to be really about this. Here, “pro-social” is good for the group, while “anti-social” is bad. Institutions or policies that undercut traditional social instincts are suspect.

While this metaphor does give insight, the game I see as a better metaphor for general social instincts is this:

Divide The Dollar Game … There are three players … 1, 2, 3. The players wish to divide 300 units of money among themselves. Each player can propose a payoff such that no player’s payoff is negative and the sum of all the payoffs does not exceed 300. … Players get 0 unless there is some pair of players {1, 2}, {2, 3}, or {1, 3} who propose the same allocation, in which case they get this allocation. …

It turns out that in any equilibrium of this game, there is always at least one pair of players who would both do strictly better by jointly agreeing to change their strategies together. …

Suppose the negotiated agreements are tentative and non-binding. Thus a player who negotiates in a sequential manner in various coalitions can nullify his earlier agreements and reach a different agreement with a coalition that negotiates later. Here the order in which negotiations are made and nullified will have a bearing on the final outcome. … It is clear that coalitions that get to negotiate later hold the advantage in this scheme. (more)

That is, most social behavior is about shifting coalitions that change how group benefits are divided, and social instincts are mostly about seeing what coalitions to join and how to get others to want you in their coalitions. Such “social” behavior isn’t good for the group as a whole, though it can be good for your coalition. Because coalition politics can be expensive, institutions or policies that undercut it can be good overall.

In this view of social behavior, we expect to see great efforts to infer each person’s threat point – how much they and a coalition would lose if they leave that coalition. We also expect even greater efforts to infer each person’s loyalty – what coalitions they are likely to prefer and help. And we expect great efforts to signal desirable loyalties and threat points. When shifting coalitions are important, we expect lots of efforts to go into seeing and changing the focal points people use to coordinate which new coalitions form, and to seeing who will be pivotal in those changes.

At a meta level, people would also try to infer what other people think about these things. That is, folks will want to know what others think about various loyalties, threat points, and focal points, and in response those others will try to signal their opinions on such things. In other words, people will want to know how well others can track and influence changing fashions on these topics. At a higher meta level, people will want to know what others think that still others think about these things, i.e., they’ll want to know who is seen to be good at tracking fashion. And so on up the meta hierarchy.

When people talk, we expect them to say some things directly and clearly to all, to influence overall focal points. But we expect many other messages to be targeted to particular audiences, like “Let’s dump that guy from our coalition.” When such targeted messages might be overheard, or quoted to others, we expect talking to be indirect, using code words that obscure meanings, or at least give plausible deniability.

A social world dominated by shifting coalitions would spend modest efforts to influence temporary policies, such has how to divide up today’s spoils, and more efforts on rare chances to change longer term policies that more permanently divide spoils. Even more effort would be spent on rare chances to change who is possible as a coalition partner, For our forager ancestors, killing someone, or letting a new person live nearby, could change the whole game. In a firm today, hiring or firing someone can have similar effects.

This view of social behavior as mostly about shifting coalitions raises the obvious question: why doesn’t most social behavior and conversation seem on the surface to be about such things. And the obvious homo hypocritus answer is that we do such things indirectly to avoid admitting that this is what we are doing. Since coalition politics is socially destructive, we have long had social norms to discourage it, such as the usual norms against gossip. So we do these things indirectly, to get plausible deniability.

This can explain why we place such a high premium on spontaneity and apparent randomness in conversation and other leisure behavior. And also why we seem so uninterested in systematic plans to prioritize our efforts in charity and other good causes. And why we drop names so often. When we manage our shifting coalitions, we prefer to stay free to quickly shift our conversations and priorities to adapt to the changing fashions. If you ever wonder why the news, public discourse, and academia seem so uninterested in the topics most everyone would agree are really important, this is plausibly why.

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Financing Starships

A science advisor to the not-entirely-realistic recent movie Gravity said:

Often a story worth telling can fall apart if there is a complete dedication to perfect science. The goal is to make everything seem grounded enough in the physical world that it seems real. So story trumps science every time. (more)

Even the science fiction that tries hardest for realism usually sacrifices it for a better story. It isn’t just that authors make accidental mistakes due to a lack of attention. Quite often, realism gets in the way of the story, because realism conflicts with our tastes in stories. That is, many features we want in stories (like good beating evil) are intrinsically unrealistic.

This is why I think it important to highlight story unrealism, especially the unrealism intrinsic to the stories said to be most realistic. Its not just gotchas to show off how much you know, or teach in the process. Its also to counter the popular illusion that stories are how-to manuals, there to teach us about reality in a fast and fun way.

Many have praised Charlie Stross’s novel Neptune’s Brood, released in July. I also enjoyed it. But economists such as Krugman and Tabarrok have praised its econ realism, and I haven’t found anyone criticizing that. So I guess such criticism is up to me (again). (I have thought about related issues before; see here, here.)

The following quotes give the setting of Neptune’s Brood. (Worry not; I give no spoilers.)
Continue reading "Financing Starships" »

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Graeber’s Debt book

About a year ago I finished David Graeber’s 2011 book Debt: The First 5000 Years. Since he’s an Occupy Wall Street anthropologist, you might expect me to dislike the book. But I enjoyed it, and learned a lot, even though it does ramble, and his economics is weak.

Graeber’s overall mood is anti-debt:

For thousands of years, the struggle between rich and poor has largely taken the form of conflicts between creditors and debtors – of arguments about the rights and wrongs of interest payments, debt peonage, amnesty, repossession, restitution, the sequestering of sheep, the seizing of vineyards, and the selling of debtors’ children into slavery. By the same token, for the last five thousand years, with remarkable regularity, popular insurrections have begun the same way: with the ritual destructions of the debt records – tablets, papyri, ledgers, whatever form they might have taken in any particular time and place. (After that, rebels usually go after the records of landholding and tax assessments.) As the great classicist Moses Finley often liked to say, in the ancient world, all revolutionary movements had a single program: “Cancel the debts and redistribute the land.” (p.8)

That is sure a dramatic image, and makes one’s opinion on debt seem pretty fundamental. Oddly, Graeber never actually comes out directly against debt. He doesn’t seem to want to forbid it. Instead he seems to just want to set a low bar for forgiving the debts of the poor, mainly because helping the poor is a good thing. The closest thing to an argument I found:

The remarkable thing about the statement “one has to pay one’s debts” is that even according to standard economic theory, it isn’t true. A lender is supposed to accept a certain degree of risk. If all loans, no matter how idiotic, were still retrievable – if there were no bankruptcy laws, for instance – the results would be disastrous. What reason would lenders have not to make a stupid loan? (p.3)

Actually standard economic theory doesn’t say that the results without bankruptcy laws would be disastrous. Yes, the more stuff people can promise as collateral to support loans, or promise to suffer if they fail to pay, the more loans will be made, and the more people there will end up poorer or suffering because they can’t pay loans. But economists can’t say this is bad without adding assumptions about why such poverty is inefficient.

You might say that poverty is economically inefficient because it makes other people feel bad to know it exists, or because it keeps investments from being made in poor folks’ human capital. It could make sense to support general redistribution to deal with such problems. But debt forgiveness is not general redistribution. A policy of forgiving the debts of the especially poor mainly keeps the nearly poor from taking out loans from which they expect to gain overall, and raises the loan interest rates they pay.

Standard economic theory says that such debt forgiveness redistributes to the very poor, but not by taxing the rich. Anticipated future debt forgiveness instead taxes the nearly poor who take out loans and then do well, by raising the interest rates at which they repay their loans.

Yes debts are one of the ways by which people take chances with their wealth level, sometimes rising and sometimes falling. And yes if we stopped the nearly poor from taking such chances we might reduce the numbers of the very poor. But why pick only on loans? There are lots of other ways in which the nearly poor take chances with their wealth level, such as by trying new careers, jobs, neighborhoods, and social groups. Should we try to stop these risky behaviors as well?

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Value Explosions Are Rare

Bryan Caplan:

I’m surprised that Robin is so willing to grant the plausibility of superintelligence in the first place. Yes, we can imagine someone so smart that he can make himself smarter, which in turn allows him to make himself smarter still, until he becomes so smart we lesser intelligences can’t even understand him anymore. But there are two obvious reasons to yawn. 1. … Even high-IQ people who specifically devote their lives to the study of intelligence don’t seem to get smarter over time. If they can’t do it, who can? 2. In the real-world, self-reinforcing processes eventually asymptote. (more)

Bryan expresses a very standard economic intuition, one with which I largely agree. But since many of my readers aren’t economists, perhaps I should elaborate.

Along most dimensions, having more of a good thing leads to less and less more of other good things. In economics we call this “diminishing returns,” and it is a very basic and important principle. Of course it isn’t always true. Sometimes having a bit more of one good thing makes it even easier to get a bit more of other good things. But not only is this rare, it almost always happens within a limited range.

For example, you might hope that if you add one more feature to your product, more customers will buy it, which will give you more money and info to add another feature, and so on in an vast profit explosion. This could make the indirect value of that first new feature much bigger than it might seem. Or you might hope that that if achieve your next personal goal, e.g., to win a race, then you will have more confidence and attract more allies, which will make it easier for you to win more and better contests, which lead to an huge explosion of popularity and achievement. This might make it very important to win this next race.

Yes, such things happen, but rarely, and they soon “run out of steam.” So the value of a small gain is only rarely much more than it seems. If someone ask you to pay extra for a product because it will start you one of these explosions, you should question them skeptically. Don’t let them do a Pascal’s wager on you, saying even if the chance is tiny, a big enough explosion would justify it. Ask instead for concrete indicators that this particular case is an exception to the usual rule. Don’t invest in a startup just because, hey, their hockey-stick revenue projections could happen.

So what are some notable exceptions to this usual rule? One big class of exceptions is when you get value out of destroying the value of others. Explosions that destroy value are much more common that those that create value. If you break just one little part in a car, then the whole car might crash. Start one little part of a house burning and the whole house may burn down. Say just one bad thing about a person to the right audience and their whole career may be ruined. And so on. Which is why there are a lot of explosions, both literal and metaphorical, in war, both literal and metaphorical.

Another key exception is at the largest scale of aggregation — the net effect of on average improving all the little things in the world is usually to make it easier for the world as a whole to improve all those little things. For humans this effect seems to have been remarkably robust. I wish I had a better model to understand these exceptions to the usual rule of rare value explosions.

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The Why-Policy-Wiki

“Normative as positive” (NAP) — explaining that the [education] policies actually chosen were chosen because they maximize an individualized social welfare function — fails as a useful general positive model of schooling. While NAP can perhaps accommodate the fact of some direct production of schooling by some governments, the reality is that (nearly) all governments produce education and that, by and large, this is their only support to education. Moreover, NAP fails not just in the large but also the small: there are six additional common facts about educational policies inconsistent with NAP. (more; HT Bryan Caplan)

That is Lant Pritchett, and I share his frustration. People usually explain their government’s policies via scenarios wherein such policies would help the world, or at least their local region. But when you point out details at odds with such simple stories, such people are usually uninterested in the subject. They switch to suggesting other scenarios or problems where policy might help, also with little interest in the details.

This evasive style, i.e., the habit of pointing to a diffuse space of possible scenarios and problems instead of particular ones, is a huge obstacle to critics. If you put a lot of time in critiquing one story, people just note that there are lots of other possible stories you didn’t critique.

This style helps people maintain idealist attitudes toward institutions they like. In contrast, people do the opposite for institutions they dislike, such as rival foreign governments or profit-making firms. In those cases, people prefer cynical explanations. For example, people say that firms advertise mainly to fool folks into buying products they don’t need. But the evasion remains; if you critique one cynical explanation they switch to others, avoiding discussing details about any one.

To solve this evasion problem, I propose we create a new kind of wiki that surveys opinions on policy explanations. In this new wiki readers could find items like ” 68% (162/238) of college graduates say the best explanation of government running schools, instead of subsidizing them, is because educated citizens can pay more taxes to benefit other citizens. 54% (7/13) of economics PhDs surveyed say it is to push propaganda.”

Here is how it would work. There would be three category hierarchies: of policies, of policy explanations, and of people with opinions on policy explanations. Each hierarchy would include a few very general categories near the top, and lots of much more specific categories toward the bottom.

Anyone could come to the wiki to contribute opinions on policy explanations. They would first give some demographic info on themselves, and that info would put them somewhere in the category hierarchy of people. They could then browse the category hierarchy of policies, picking a policy to explain. Finally, they could browse the category hierarchy of explanations, picking their favored explanation of that policy.

Users could start by being shown the most common explanation offered so far for similar policies by similar people, and then browsing away from that. Users could also expand the category hierarchies, to add more specific policies and explanations. For particular policy explanation pairs, users might add links to relevant theory, evidence, and arguments. Users might also upvote links added by others. This would help later readers search for well-voted evidence and theory close in the hierarchies to any given policy explanation.

By using category hierarchies, a wide range of people could express a wide range of opinions. Experts could dive into details while those who can barely understand the most basic categories could gesture crudely in their favored directions. Given such a wiki, a critic could focus their efforts on the most popular explanations for a policy by their target audience, and avoid the usual quick evasion to other explanations. Prediction markets tied to this wiki could let people bet that particular explanations won’t hold up well to criticism, or that popular opinion on a topic will drift toward a certain sort of expert opinion.

Of course this wiki could and should also be used to explain common policies of firms, clubs, families, and even individuals. I expect some editorial work to be needed, to organize sensible category hierarchies. But if good editors start the system with good starting hierarchies, the continuing editorial work probably wouldn’t be prohibitive.

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